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3 years ago

What is the future value of $450 at an interest rate of 15 percent one year from today?

Business

1 answer:

gladu [14]3 years ago

3 0

Answer:

$517.50

Explanation:

we have to use the future value formula:

future value = present value x (1 + interest rate)ⁿ

present value = $450
interest rate = 15%
n = 1 year

future value = $450 x (1 + 15%) = $450 x 1.15 = $517.50

The basic premise of finances is that the value of money changes over time, i.e. one dollar today is worth more than one dollar tomorrow. That is because the money yo have today can be invested and it can interest, therefore, it will be worth more in the future.

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A factory costs $400,000. It will produce an inflow after operating costs of $100 000 in year 1. $ 200,000 in year 2, and $ 300,

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Answer:

NPV = $62,258.56

Explanation:

initial outlay year 0 = $400,000

cash inflow year 1 = $100,000

cash inflow year 2 = $200,000

cash inflow year 3 = $300,000

discount rate = 12%

using a financial calculator, NPV = $62,258.56

if you do it by hand:

NPV = -$400,000 + $100,000/1.12 + $200,000/1.12² + $300,000/1.12³ = -$400,000 + $89,285.71 + $159,438.78 + $213,534.07 = $62,258.56

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2 years ago

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